skip to main content

Ovum view


BNP Paribas and IBM have renewed their 15-year-old IT services joint venture, BNP Paribas Partners for Innovation (BP²I), for a further eight years. The renewal, now extended to include cloud resources, shows that there is life in big-time IT infrastructure management deals. We have valued the deal at $2.4bn on Ovum's IT Services Contracts Analytics (ITSCA) database.

Banks line up for new IT services

In January 2019, IBM announced a series of major IT services deals and renewals with banks, including BNP Paribas, Bank of the Philippine Islands, and Nordea Bank. The biggest of these is with the Paris-headquartered global bank BNP Paribas. BNP Paribas and IBM Services are extending their 15-year-old IT infrastructure management partnership, BNP Paribas Partners for Innovation (BP²I) – a joint venture between BNP Paribas and IBM established in 2004. IBM will continue to manage IT services for BNP Paribas for a further eight years. Business media reports suggest the deal is worth around $2bn to IBM. We estimate the deal is worth more at $2.4bn due to the following:

  • The original agreement establishing BP²I, signed in December 2003, was stated to be worth "up to €1bn ($1.14)" over eight years (ITSCA deal ID 21431). That included setup, implementation, and organizational costs, but only covered operations in France.

  • When, at the end of 2011, the agreement was re-signed for a further six years (ID 38487), it had been extended to Belgium, Italy, and Switzerland:

    • Italy's Banca Nazionale del Lavoro signed a €318m ($412.5m) agreement for BP²I services in January 2009 (ID 33043).

    • Belgium-based BNP Paribas Fortis joined the agreement in 2012. Ovum research has found the bank spent €410m ($540m) with BP²I between 2013 and 2017 (ID 51992).

  • These deals overlap the original agreement, but it seems that BNP was spending up to €260m ($297) a year once its major European subsidiaries had been engaged, and spent more than €3bn ($3.4) with IBM by the end of 2017.

  • The deal being renewed for a further eight years suggests that both parties have seen value in the deal so far. Assuming the rate of spend is maintained across BNP's global operations, that would represent a new commitment to spend about $2.4bn over the term.

Why this matters

The deal can be seen in the context of BNP's $3.4bn investment in its digital transformation program, announced in 2017. In the next phase of the agreement, BNP Paribas will integrate its existing private cloud resources with the private IBM Cloud, hosted in data centers dedicated to the bank. While there will be savings to be had in cloud-based services, BNP's infrastructure is not yet virtualized. However, the new agreement envisages the development of new digital services for the bank, which will be dependent on cloud resources. This is important for IBM, as other cloud service providers, including Amazon Web Services and Microsoft, have been announcing large, managed cloud services deals for enterprise and public sector customers recently, and competition is clearly developing in managed services for hybrid IT infrastructure, and cloud services. Cloud infrastructure deals are scaling, and so are the demands and opportunities to add digital business services into the managed service.


Further reading

IT Services Contracts Analytics

IBM's Cloud Will Benefit from More Independence, ENS004-000033 (June 2018)

"Cloud will move mainstream in the banking sector in 2019," ENV004-000019 (November 2018)


David Molony, Principal Analyst, Enterprise Services

[email protected]